Stocks End Week Higher Amid Inflation Worries
The US stock market closed higher on Friday after Federal Reserve Chairman Kevin Warsh expressed concerns about inflation trends. The Dow Jones slipped 0.25% to close at 7,711.76, while the Nasdaq dropped 0.52% to 26,402.42 due to declines in semiconductor stocks like Nvidia and Intel.
Warsh's comments at the Fed's annual symposium in Jackson Hole, Wyoming, sent a signal that the central bank might raise interest rates in September. This led to a surge in bets on a rate hike, with markets pricing in a 57.5% probability of a hike, up from 35.4% a day earlier.
Investors are now looking ahead to this week's US labor-market data, particularly the August jobs report due Thursday, which could shape expectations for the Fed's next move. Economists polled by Reuters expect employment to have risen by 58,000 in August, with unemployment holding at 4.1%.
Several companies are set to release their quarterly earnings reports this week, including Nvidia on Wednesday, Dell Technologies, Palo Alto Networks, HPE, Snowflake, and Lululemon. Analysts at Evercore ISI noted that the recent earnings season has been extraordinary, with 86% of companies beating Q2 EPS estimates by a wide margin.